Civil Service Salaries Have Not Risen in Real Terms since 1970
by ukcivilservant
I recently contributed to a fun blog, mainly written by economist Tom Weiss, which noted that modern day James Bonds, on Grade 7 salaries, could no longer entertain and dine in 007’s favourite restaurants. This made me wonder how Grade 7 salaries have compared with those in the wider economy, and with inflation.
I haven’t been able to get reliable Principal/G7 or wider economy earnings figures before 1970, but the later trends are startling. If I have got it right, the salaries of those in this key civil service grade have fallen well behind those in the wider economy, haven’t kept up with inflation as measured by the RPI, and have only just kept up with with CPIH. The figures are summarised in this chart.
Senior Civil Service salaries have generally increased even less, whilst the salaries of more junior staff have not been so badly affected. Further information about civil service pay is here.
A small part of the relative increase in private sector salaries, compared with civil servants, may be due to reductions in private sector contributions to pension schemes which will have necessitated increases in gross salaries so that retirement pension funds and other savings can be built up by employees. Civil service pension schemes, too, became less generous, but probably to a smaller extent.
The long term pressure on G7 salaries also led to a certain amount of ‘grade drift/inflation’:- a reduction in the difficulty of the work done by many G7s, so allowing the employment of less effective and/or less experienced staff than in previous generations.
I would be delighted if those more expert than me could improve or correct my analysis which is in a spreadsheet which can be downloaded here. (And thanks to David Higham for pointing me in the direction of much of the data.)
Martin Stanley
Editor – Understanding the Civil Service
Richborne Publishing
ukcivilservant 
Interesting findings! What do you think the effect has been on the talent that the Civil Service is able to recruit? Has the 2022 talent equivalent to a 1970 G7 pursued higher salaries (whether at higher grades or outside the Civil Service) or does the 2022 G7 salary still attract talent equivalent to 1970 G7s?
If it is the former of the above options, then this chart seems to indicate that the Government will have less capable people at its command or that grade inflation is only going to persist. If it is the latter, then restraining Civil Service pay seems like a prudent move for achieving good value for money while still maintaining the level of talent (though how sustainable it will continue to be is a separate question).
Martin
We all know (and experienced!) this but it’s still remarkable to see the extent of it.
I did wonder whether Grade 7 was the most accurate representation of the true picture. I say that because, in my estimation, the fall in salaries has been partly mitigated by grade drift; and my sense is that this is most apparent at the Grade 6/7 level, given how few Senior Principals there used to be (I speak as a former Grade 6 who benefitted from this drift). The picture may also be different (worse?) for the Senior Civil Service.
Tony